The price band for the IPO of CMS Info Systems has been fixed at Rs 205-216 per share. Investors can bid for 69 shares in a single lot.
CMS Info Systems IPO: The Rs 1,100 crore IPO of cash management company CMS Info Systems has opened for subscription today. This IPO is purely on offer for sale (OFS), that is, new shares will not be issued under it. The sale of 5.3 crore equity shares will be done by the existing shareholders of the company under OFS. The company has already raised Rs 330 crore from anchor investors. To invest in this IPO, a price band of Rs 205-216 per share and a lot of 69 shares has been fixed. This IPO will be open for subscription till 23 December i.e. Thursday.
IPO related details
- The price band for the IPO of CMS Info Systems has been fixed at Rs 205-216 per share. Its face value per share is Rs 10.
- Investors can bid for 69 shares in a single lot. In this way, according to the upper price of the price band, investors will have to invest at least Rs 14,904.
- Half of the IPO or 2.68 crore shares are reserved for Qualified Institutional Buyers (QIBs). At the same time, 35 percent or 1.87 crore shares have been reserved for retail investors and the remaining 15 percent for non-institutional investors.
- CMS Info Systems will not get any funds from the IPO as it is completely OFS. Post the issue, the promoter’s stake in the company will come down to 65.59% from the current 100%. That is, the public shareholding in CMS Info Systems will increase from zero to 34.41 percent.
- Twelve anchor investors have purchased stake in CMS Info Systems through the anchor portion of the issue. These include Nomura India Investments, SBI Smallcap Fund, Goldman Sachs, Aditya Birla Sun Life, ICICI Prudential and BNP Paribas.
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should you subscribe
- “At the higher price band of Rs 216, CMS is demanding a P/E multiple of 19x (its FY21 earnings stood at Rs 11.4), which is in line with the multiple of its only listed peer,” said analysts at Choice Broking.
- He further said, “The role of cash in the domestic economy is increasing continuously. Furthermore, keeping in mind the diversified product portfolio in the company’s cash management value chain as well as its dominant market position in the sector, we are giving this issue a ‘Subscribe’ rating. SIS Limited is a listed peer of CMS Info Systems, trading at a P/E of 19.70.
- CMS Info Systems is the largest cash management company in India by number of ATM points and retail pick-up points. Analysts at Marwari Financial Services said the company has a market share of 24.7% based on the total number of ATMs in India, as well as a market share of 41.1% based on the total number of outsourced ATMs in India.
- Customers in CMS Info Systems’ retail cash management business are primarily banks, including Axis Bank, HDFC Bank, ICICI Bank and IDBI Bank, among others.
- Analysts at the brokerage firm have valued the issue at a P/E of 19.48 with a market cap of Rs 3,19,680 lakh. He said, “We assign subscribe rating to this IPO as it is the largest cash management company in India. It is available at a reasonable valuation as compared to its peers.”
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subscription status
Retail investors have subscribed 0.39 times their share of the issue so far on the first day of subscription. At present, there is little interest in the QIB and NII portions of the issue. Overall, the subscription tally for CMS Info Systems IPO is 0.20 times after the opening hour of bidding.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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